How 503B partnerships are helping hospitals and IDNs navigate drug shortages, COVID-19 and more

There is no question that this year has been challenging for hospitals and health systems. Caring for patients with COVID-19 has led to various drug shortages and other supply chain disruptions after widespread halts in elective procedures.

Becker’s Hospital Review recently spoke with two executives from Fagron Sterile Services US (FSS), a FDA/DEA registered and inspected 503B outsourcing facility, about how best-in-class 503Bs are helping integrated delivery networks (IDNs), hospitals and other healthcare providers amid the pandemic. 503B outsourcing providers with a strong commitment to quality and innovation are differentiating themselves from their peers, as well as from traditional pharmaceutical manufacturers.

As the number of COVID-19 patients on ventilators grew, drug shortages increased

Throughout the pandemic, one major challenge faced by health systems has been shortages of narcotics, such as fentanyl and hydromorphone, to sedate patients requiring a ventilator. “We had partners telling us that they couldn’t help these patients and they had trucks lined up behind their facilities for the fatalities,” said Glen Olsheim, FSS’ Vice President of New Product and Business Development.

In response, FSS quickly pivoted to respond to regions where novel coronavirus infections were flaring up. The team moved efficiently to make larger 30-milliliter and 50-milliliter syringes of the drugs needed for patients on ventilators. “Those products were presentations that we didn’t have in stock, but we did the work needed to manufacture them in a high-quality way,” explained Mark Spinelli, Director of Validation.

One unique aspect of the COVID-19 pandemic is that product demand for pharmaceuticals hasn’t been uniform. As New York and California were struggling, for example, Kansas was still doing business as usual and Georgia was reopening. Fagron Sterile Services US throttled down on production of pharmaceuticals used for elective surgery procedures in order to devote resources to emergency room molecules. Production capacity needed to be rebalanced, however, as demand for elective surgeries rebounded.

FSS started conversations with partners about the longer-term outlook and their financial situation. “We kept in closecontact with our customers to really understand what was going on in their business. We didn’t want to overproduce drugs they didn’t need, but we also wanted to ensure that they would be ready to reopen their ambulatory surgery centers and eye clinics. We tried to help out in smaller ways, as well, with targeted price reductions and rebates to support clients during this time of significant financial distress,” said Andrew Pulido, president of Fagron North America.

A culture of quality plus consistent product availability equals increased patient safety

Fagron Sterile Services US has differentiated itself in the 503B market through its commitment to putting customers and patients first. The company has implemented robust quality processes at every step of the journey, from supplier qualifications and audits to inspections, testing of incoming materials, product development, process validation, staff training, environmental monitoring, automation, visual inspection and end-product testing.

"Of all the things that are important to our organization, none is more important than quality. We will never sacrifice quality to get a product out the door. If we have to make a tradeoff, quality will trump every time," explained Mr. Pulido.

FSS has focused on automation, which removes human contact from the manufacturing process. “The biggest danger in any sterile transfer in pharmaceutical manufacturing is humans. The more we can remove humans from the process and automate production, the better our products will be in terms of their safety and efficaciousness for patients,” said Mr. Olsheim.

The company also has its own in-house laboratory — something that is unique among 503B outsourcing facilities. This enables FSS to perform over 95 percent of its testing internally and to control the quality of its laboratory services. It also reduces the time needed to release a product.

Another key differentiator for the company is its ability to continuously supply clients with products. Fagron Sterile Services US maintains a greater than 97 percent fill-rate on orders placed before cutoff times. In most cases, drugs ship out on the same day they are ordered.

"We pledge to deliver a consistent supply of product to committed customers because we have a partnership with them. We think that’s important and it affects the quality of patient care," said Mr. Pulido.

If a healthcare provider has to switch among two or three different products due to supply issues, it can create medication safety issues for patients. When staff have to continually adjust to new labeling and product presentation, it often creates confusion. To minimize variability and confusion, it is preferable to have the same product constantly available.

Partnerships are a key to unique products that improve provider efficiency and patient outcomes

Fagron Sterile Services US’ robust product portfolio includes a complete line of ophthalmics, as well as specialty products and products used in anesthesia settings. The company has a reputation for customizing its portfolio to meet the product needs of health system partners. It has developed several different controlled substances, local anesthetics and other injectables for specific customers.

"We see this as a partnership. We have the ability to create new sterile products that will make a difference for customers. They, in turn, provide us with an opportunity to demonstrate our committed supply of safe, effective, sterile medications," said Mr. Pulido.

FSS is constantly exploring new product innovations to improve patient outcomes. For example, this fall the company is launching a sterile topical anesthetic LET gel made with lidocaine, epinephrine and tetracaine. This will be the first sterile topical LET gel in the marketplace that medical professionals can use on open wounds as an anesthetic and a vasoconstrictor.

Another product innovation from Fagron Sterile Services US is Avastin for ophthalmic use in a new silicone-free syringe that was developed in collaboration with West Pharmaceutical Services. "We are committed to use the most sophisticated containers in terms of technology, storage and administration for our compounded sterile solutions. Our new Avastin syringe is designed specifically to store a biologic," noted Mr. Olsheim.

In addition to these offerings, FSS is validating its first wave of IV infusion bags that will contain controlled substances, oxytocin and other drugs. The company has been in close contact with customers to understand which products it should prioritize. Looking ahead, FSS is in the planning stages for other new products like epidurals and patient-controlled analgesics that will come in cassettes, bags and syringes.

"Rather than trying to compete with offerings that are standard, we are looking to supply customers with unique products that will make them more efficient, while improving patient safety and outcomes,” said Mr. Olsheim.


Best-in-class 503B outsourcing providers like Fagron Sterile Services US have proven that they can be more nimble, transparent and entrepreneurial than pharmaceutical manufacturers. If a drug doesn’t exist in a customer’s desired concentration or volume, they can create it. They work with specific clients on specific needs at much smaller volumes.

FSS' commitment to quality, innovation and customer service is rooted in the experience of its leaders. The executives have walked in the shoes of large integrated delivery networks and hospital systems. They understand the expectations related to medication safety and quality, as well as the financial challenges. The team also is familiar with the ins and outs of hospital operations, including ambulatory surgery centers where key concerns include patient throughput, staff efficiency, controlled substance accountability and regulatory compliance.

Whether the market challenges are a global pandemic like COVID-19 or more routine operational concerns, the Fagron Sterile Services US team comes together to provide safe and reliable pharmaceutical solutions. "Our company is committed to quality products and safety, which is a big deal in this business. A lot of our competitors aren't making the investment that we are in automation or focusing on quality first. We are well regarded by the regulatory agencies, pharmacy boards and our customers," said Mr. Spinelli. 

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